ECONOMICS

Detailed explanation-1: -“Opportunity cost is the value of the next-best alternative when a decision is made; it’s what is given up, ” explains Andrea Caceres-Santamaria, senior economic education specialist at the St. Louis Fed, in a recent Page One Economics: Money and Missed Opportunities.

Detailed explanation-2: -When choosing an option among multiple alternatives, the opportunity cost is the gain from the alternative we forgo when making a decision. In simple terms, opportunity cost is our perceived benefit of not choosing the next best option when resources are limited.

Detailed explanation-3: -Opportunity cost is the value of the best alternative forgone in making any choice.

Detailed explanation-4: -Opportunity cost is the value of the best opportunity forgone in a particular choice. It is not simply the amount spent on that choice. The concepts of scarcity, choice, and opportunity cost are at the heart of economics. A good is scarce if the choice of one alternative requires that another be given up.

Detailed explanation-5: -Opportunity cost is the value of the next best alternative to a given choice.